Acco Engineered Systems v. Contractors' St. License Bd. ( 2018 )


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  • Filed 11/15/18; pub. order 12/13/18 (see end of opn.)
    IN THE COURT OF APPEAL OF THE STATE OF
    CALIFORNIA
    SECOND APPELLATE DISTRICT
    DIVISION FIVE
    ACCO ENGINEERED                                  B282944
    SYSTEMS, INC.,
    (Los Angeles County
    Plaintiff and                               Super. Ct. No.
    Appellant,                                       BS159740)
    v.
    CONTRACTORS' STATE
    LICENSE BOARD,
    Defendant and
    Respondent.
    APPEAL from judgment of the Superior Court of Los
    Angeles County, Mary Strobel, Judge. Affirmed.
    Hunt Ortmann Palffy Nieves Darling & Mah, Dale A.
    Ortmann, Lisa Lawrence, for Plaintiff and Appellant.
    Xavier Becerra, Attorney General, Thomas L. Rinaldi,
    Supervising Deputy Attorney General, Steve J. Pyun,
    Deputy Attorney General, for Defendant and Respondent.
    __________________________
    Plaintiff and appellant ACCO Engineered Systems,
    Inc. (Acco) appeals from a judgment denying Acco’s petition
    for a writ of mandamus. Acco’s writ petition sought review
    of an administrative decision adopted by the Registrar of the
    defendant and respondent the Contractors’ State License
    Board (Board), finding Acco in violation of Business and
    Professions Code section 71101 for failing to obtain a
    building permit before replacing a boiler.
    Acco contends it did not violate section 7110 because it
    did not willfully disregard the permit requirement. The
    company argues that both the administrative law judge and
    the trial judge erroneously interpreted the code section to
    apply to situations where a contractor inadvertently fails to
    obtain a permit. Acco further argues that even under the
    administrative judge’s interpretation, the decision is not
    supported by substantial evidence. We reject Acco’s various
    arguments and affirm the judgment.
    1All further statutory references are to the Business
    and Professions Code unless otherwise stated.
    2
    FACTUAL AND PROCEDURAL BACKGROUND
    Acco is a large contracting company that does over
    $800 million in work a year, ranging from large projects like
    the renovation of Dodger Stadium or construction on the
    Wilshire Grand building to smaller mechanical projects
    worth a few thousand dollars.
    In 2014, the Board investigated a complaint that in
    2011 and 2012, Acco had replaced a boiler at a commercial
    building without obtaining the permits required by a Los
    Angeles city ordinance that adopts the California
    Mechanical Code’s permitting requirements. After receiving
    notice of the Board’s investigation, Acco conducted its own
    investigation as well. The company acknowledged that
    permits were required and admitted that no permits were
    obtained at the time the work was conducted. It belatedly
    applied for and obtained the necessary permits in July 2014.
    Acco attributed the failure to obtain the needed permits to
    the inadvertence of a lower level employee.
    The Board issued a citation, imposing a civil penalty of
    $500 on Acco for violation of section 7110, which provides
    that “Willful or deliberate disregard and violation of the
    building laws . . . constitutes a cause for disciplinary action.”
    Acco appealed, and an administrative hearing took place in
    September 2015. Board investigator David Dance and Acco’s
    Chief Executive Officer Peter H. Narbonne testified.
    Narbonne is the company’s responsible managing officer or
    license qualifier for six of Acco’s contractor’s licenses. At the
    3
    hearing, it was undisputed that permits were required for
    installation of a boiler and a pressure vessel and that Acco
    completed the work without obtaining a permit. Both
    parties presented written briefs and oral argument on the
    key issue of whether Acco’s failure to obtain the required
    permits was “willful” within the meaning of section 7110.
    The administrative law judge made factual findings,
    which included the following: Acco had a valid contractor’s
    license, including a license for the classification of “C-4—
    Boiler Hot Water Heating & Steam Fitting.” In the 2011-
    2012 time frame, Acco performed work for a
    customer/building owner to replace a boiler in the building.
    Acco admitted that a permit was required before work
    commenced, and that it was responsible for obtaining the
    permit. Acco further admitted that, by mistake, it performed
    the work without a permit. Finding number 6 stated in full:
    “The mistake was that of an employee, a manager who had
    been instructed to check with [Acco’s] in-house expert on
    building permits on whether a permit was required. All
    managers employed by [Acco] were so instructed with
    respect to any project as to which the question of whether a
    permit was required might arise. In this instance, the
    manager failed to check with the in-house expert. The boiler
    project was to exchange like for like, replacing an old boiler
    with a new one. Permits are not required for many like-for-
    4
    like exchanges.”2 Acco became aware of the mistake when
    the Board began an investigation. The company “promptly
    sought a permit for and inspection of the work. The permit
    issued and by early August 2014, a final inspection of the
    work took place. No corrections were required.”
    In its legal conclusions, the administrative judge found
    no evidence that Acco’s failure to obtain a permit before
    replacing the boiler was “‘deliberate’ within the meaning of
    . . . section 7110;”3 however, the administrative law judge
    found that Acco’s conduct was “‘willful.’” Noting Acco’s
    argument that the failure to obtain the required permit was
    an inadvertent mistake, and therefore should not be
    considered “willful” under section 7110, the court concluded
    that Acco’s “manager who decided to proceed without a
    permit was doing so by disregarding both the law requiring a
    permit and an instruction from his employer to consult an
    in-house expert on building permits. . . . Such double
    disregard cannot be characterized as simply inadvertent, but
    2 The employee manager referred to no longer worked
    at Acco by the time of the hearing, no testimony from that
    employee manager regarding his actions was introduced into
    evidence, and the company’s witness, Narbonne, never
    talked to the employee and could only surmise what the
    employee was thinking.
    3 At the hearing, the investigator, Dance, testified he
    made no effort in his investigation to ask or determine
    whether an Acco representative made a conscious or
    deliberate decision not to obtain a permit.
    5
    rather willful misconduct within the meaning of the statute.”
    Noting that civil penalties under the statute serve a dual
    purpose—to punish past conduct and to deter future
    misconduct—and acknowledging that Acco had made efforts
    to ensure compliance with the building laws and took
    prompt action to correct their mistake by obtaining the
    required permit, the administrative law judge reduced the
    penalty amount from $500 to the minimum civil penalty of
    $200.
    Acco then filed a petition for a writ of administrative
    mandamus pursuant to Code of Civil Procedure section
    1094.5 with the trial court. Acco’s petition, like the current
    appeal, asserted that the administrative decision
    erroneously interpreted section 7110 to not require a
    showing of specific intent to disregard and violate the
    building laws. Acco also argued that the Board had the
    burden to prove a violation of section 7110, and there was no
    evidence that Acco had willfully violated the building laws.
    The trial court denied the petition, reasoning that the term
    “willful” in section 7110 only requires a showing of general
    intent, not specific intent to violate the law as Acco was
    arguing. The trial court further found that the
    administrative record contained substantial evidence to
    support the administrative law judge’s finding of a willful
    violation, because Acco’s project manager made an
    affirmative decision to proceed without a permit when he
    disregarded his employer’s instructions to consult Acco’s
    permitting coordinator.
    6
    DISCUSSION
    Acco does not dispute that a Los Angeles city ordinance
    required permits for the boiler replacement, or that it did not
    obtain the required permits and was therefore in violation of
    the applicable building laws. Acco’s argument for why
    section 7110 does not authorize disciplinary action in this
    particular case centers on the meaning of the term “willful”
    as used in that section. Acco argues that because the failure
    to obtain the required permits was an inadvertent mistake
    by a low-level employee, it was not a willful violation of the
    permit requirement. Acco argues that willful as used in
    section 7110 must be interpreted to require a specific intent
    to violate the law. In response, the Board argues that a
    general intent to act is sufficient to satisfy section 7110’s
    requirement of a willful violation of the permit
    requirements.
    Considering the statutory scheme as a whole, we reject
    Acco’s arguments and agree with the Board that the
    Legislature’s use of the term “willful” in section 7110 only
    requires a showing of general intent. We also conclude there
    is substantial evidence to support the administrative judge’s
    determination that Acco willfully violated the applicable
    building laws. The fact that an individual employee may not
    have been aware of a specific local permit requirement does
    not excuse a corporate licensee from complying with the
    building laws.
    7
    Standard of review
    On appeal, we review the administrative record to
    determine whether factual findings were supported by
    substantial evidence. (Handyman Connection of
    Sacramento, Inc. v. Sands (2004) 
    123 Cal. App. 4th 867
    , 880–
    881 (Handyman) [where the challenged sanction is a fine,
    and not revocation or suspension of a petitioner’s license, the
    trial court and the reviewing court determine whether
    substantial evidence supports factual findings]; MHC
    Operating Limited Partnership v. City of San Jose (2003) 
    106 Cal. App. 4th 204
    , 217–220.) We review questions of law de
    novo, applying our own independent judgment. (Owen v.
    Sands (2009) 
    176 Cal. App. 4th 985
    , 989; 
    Handyman, supra
    ,
    at p. 880.) To the extent we are engaging in statutory
    interpretation, “we must give deference to the Board’s
    interpretations, but not to the exclusion of other tools of
    statutory construction. ‘[T]he binding power of an agency’s
    interpretation of a statute or regulation is contextual: Its
    power to persuade is both circumstantial and dependent on
    the presence or absence of factors that support the merit of
    the interpretation.’ (Yamaha Corp. of America v. State Bd.
    of Equalization (1998) 
    19 Cal. 4th 1
    , 7 [(Yamaha)].)”
    (
    Handyman, supra
    , at p. 881.)
    8
    Statutory interpretation of the Contractors’ State
    License Law
    “Our role in construing a statute is to ascertain the
    intent of the Legislature so as to effectuate the purpose of
    the law. [Citation.] Because the statutory language is
    generally the most reliable indicator of that intent, we look
    first at the words themselves, giving them their usual and
    ordinary meaning. [Citation.] We do not, however, consider
    the statutory language in isolation, but rather examine the
    entire substance of the statute in order to determine the
    scope and purpose of the provision, construing its words in
    context and harmonizing its various parts. [Citation.]”
    (Alford v. Superior Court (2003) 
    29 Cal. 4th 1033
    , 1040.) “We
    interpret relevant terms in light of their ordinary meaning,
    while also taking account of any related provisions and the
    overall structure of the statutory scheme to determine what
    interpretation best advances the Legislature’s underlying
    purpose.” (Los Angeles County Bd. of Supervisors v. Superior
    Court (2016) 2 Cal.5th 282, 293.) The legislative history of a
    statute may be useful in this examination. (Dyna–Med, Inc.
    v. Fair Employment & Housing Com. (1987) 
    43 Cal. 3d 1379
    ,
    1387.) So may the interpretation of a statute by the agency
    charged with implementing it. 
    (Yamaha, supra
    , 19 Cal.4th
    at p. 7.)
    The Contractors’ State License Law (License Law) is
    codified at Business and Professions Code section 7000 et
    seq. The License Law is to be given a “reasonable and
    practical construction” “[i]n light of the intent of the
    9
    Legislature and the purpose behind the statutory scheme—
    to protect consumers and the public from dishonest or
    incompetent contractors.” (Viking Pools, Inc. v. Maloney
    (1989) 
    48 Cal. 3d 602
    , 607 (Viking Pools); see also
    
    Handyman, supra
    , 123 Cal.App.4th at pp. 881–882.)
    Reviewing the statutory scheme as a whole, we begin
    with the relevant requirements for obtaining a contractor’s
    license. (See, 9 Miller & Starr, Cal. Real Estate (4th ed.
    2018) §§ 3:4–3:5, pp. 31-25–31-32.) The Board has authority
    to grant licenses not just to individuals, but to business
    entities such as partnerships, corporations, or limited
    liability companies. If a business entity applies for a license,
    it qualifies through an individual who is a responsible
    managing officer, manager, member, or employee. (Id. at
    p. 31-28; § 7068, subd. (b)(2)–(4).) The individual must
    demonstrate his or her general knowledge of the building,
    safety, health, and lien laws of the state and of the
    administrative principles of the contracting business.
    (§ 7068, subd. (d).) He or she is “responsible for exercising
    that direct supervision and control of his or her employer’s or
    principal’s construction operations to secure compliance with
    this chapter and the rules and regulations of the board.”
    (§ 7068.1, subd. (a).) Failure to do so is grounds for
    disciplinary action and is a misdemeanor, punishable by
    imprisonment in jail for up to six months, a fine between
    $3,000 and $5,000, or both. (§ 7068.1, subd. (e); see also, 9
    Miller & Starr, 9 Cal. Real Estate (4th ed. 2018) § 31.5,
    p. 31-29.)
    10
    “One of the key purposes of the contractor’s license law
    is to protect the public against dishonesty and incompetency
    in the administration of the contracting business.
    [Citations.] The function of an administrative proceeding
    such as the one here is not criminal in that its goal is not to
    punish the prospective licensee but to protect the public.
    The hearing is to insure that the privileges granted under
    the license will not be exercised in derogation of the public
    interest.” (Housing Development Co. v. Hoschler (1978) 
    85 Cal. App. 3d 379
    , 388 (Hoschler), italics added [addressing a
    situation where the Board refused to grant a license].)
    Disciplinary proceedings under the License Law serve
    a similar purpose of protecting the public. The purpose of
    such proceedings “‘is to determine the fitness of a licensed
    contractor to continue in that capacity. It is not intended for
    the punishment of the individual contractor, but for the
    protection of the contracting business as well as the public
    by removing, in proper cases, either permanently or
    temporarily, from the conduct of a contractor’s business a
    licensee whose method of doing business indicates a lack of
    integrity upon his part or a tendency to impose upon those
    who deal with him. . . .’” (Viking 
    Pools, supra
    , 48 Cal.3d at
    p. 607.) The License Law authorizes disciplinary action
    against licensees for a wide variety of conduct, including
    willful departure from accepted trade standards (§ 7109),
    failure to maintain records (§ 7111), or overpricing after a
    state of emergency (§7123.5; Pen. Code, § 396). (See also 9
    Miller & Starr, 9 Cal. Real Estate (4th ed. 2018) § 31.11,
    11
    p. 31-71–31-75 [listing grounds for disciplinary action].) The
    Board’s authority includes not just authority to revoke or
    suspend a contractor’s license, but also the authority to issue
    a citation and impose civil penalties between $200 and
    $15,000. (9 Miller & Starr, Cal. Real Estate (4th ed. 2018)
    § 31.11, p. 31-69; see also §§ 7099–7099.5.)
    Willful violation of building laws
    The portions of the License Law identifying grounds for
    disciplinary action vary, and some use the term “willful” in
    describing conduct subject to disciplinary action, while
    others do not. (See Bailey-Sperber, Inc. v. Yosemite Ins. Co.
    (1976) 
    64 Cal. App. 3d 725
    , 729 (Bailey-Sperber).) The
    statutory scheme does not define the term “willful,” however,
    “[w]e must assume that the difference in statutory
    phraseology among the sections indicates a legislative
    determination to differentiate between conduct not subject to
    discipline where inadvertent and that subject to discipline
    even inadvertent.” (Id. at p. 729.) For example, the Bailey-
    Sperber court drew a distinction between sections that
    require willful conduct and those that do not. The court
    pointed out that section 7109 only makes departure from
    plans, specifications, and trade standards a cause for
    discipline if the departure was willful. In contrast, sections
    7107 and 7113, which identify project abandonment and
    failure to complete within the contract price as causes for
    12
    disciplinary action, do not require that the actions be willful.
    (Ibid., fn. 5.)
    In interpreting disciplinary provisions of the License
    Law, two later cases have referred to the definition of willful
    given in Penal Code section 7, subdivision (1),4 which
    requires only a general intent to perform an act, not a
    specific intent to violate a law. (People v. Licas (2007) 
    41 Cal. 4th 362
    , 366 [“[c]onviction under a statute proscribing
    conduct done ‘willfully and maliciously’ does not require
    proof of a specific intent”].) In Mickelson Concrete Co. v.
    Contractors’ State License Bd. (1979) 
    95 Cal. App. 3d 631
    , at
    page 635 (Mickelson), the court cited to Penal Code section 7,
    subdivision (1)’s definition of “willfully” when it affirmed
    discipline under section 7109 based on facts showing a
    contractor’s “purposeful departure from accepted trade
    standards which may be properly characterized as ‘willful.”’
    In Tellis v. Contractors’ State License Bd. (2000) 
    79 Cal. App. 4th 153
    (Tellis), a contractor challenged discipline
    imposed under section 7109, subdivision (a), for substandard
    work on a home. The statutory text stated, “A willful
    departure in any material respect from accepted trade
    standards for good and workmanlike construction
    4  The subdivision states “[t]he word “willfully,” when
    applied to the intent with which an act is done or omitted,
    implies simply a purpose or willingness to commit the act, or
    make the omission referred to. It does not require any intent
    to violate law, or to injure another, or to acquire any
    advantage.” (Pen. Code, § 7, subd. (1).)
    13
    constitutes a cause for disciplinary action, unless the
    departure was in accordance with plans and specifications
    prepared by or under the direct supervision of an architect.”
    (Id. at p. 158.) The Board’s argument in Tellis was similar
    to the one it makes in this case, that all that the statute
    requires is the willful act of performing substandard
    construction; there is no need to demonstrate that the
    contractor knew the work was substandard. (Id. at pp. 158–
    159.) The Tellis court briefly discussed the Mickelson
    decision, noting the Mickelson court’s citation to Penal Code
    section 7, subdivision 1. (Id. at p. 159.) The Tellis court
    avoided deciding whether general or specific intent was
    necessary, instead assuming that section 7109 requires a
    contractor to know the work is substandard. It then
    concluded there was sufficient evidence to support a finding
    of such knowledge, given the egregious nature of the
    substandard work, including tiles falling off and a leaking
    shower stall. (Id. at pp. 159–160.)
    Acco points out that the only case involving section
    7110, the provision at issue here, rather than 7109, focused
    on the meaning of “willful” as used in Labor Code section
    227, not in section 7110. 
    (Hoschler, supra
    , 85 Cal.App.3d at
    p. 389.) In Hoschler, the contractor argued that its
    managing member’s good faith belief he did not have an
    obligation to make certain payments to unions negated any
    potential violation of Labor Code section 227, which
    prohibited an employer from “willfully or with intent to
    defraud” failing to make such payments. The court rejected
    14
    the argument, finding substantial evidence in support of the
    administrative judge’s conclusion that the failure to pay was
    not based upon a good faith dispute. (Id. at pp. 388–389.)
    Acco argues that instead of following the general intent
    definition of willful set forth in Penal Code section 7,
    subdivision (1), we should follow Kwan v. Mercedes-Benz of
    North America, Inc. (1994) 
    23 Cal. App. 4th 174
    (Kwan) and
    find that a more targeted definition of willful is needed
    under section 7110. In Kwan, a state consumer warranty act
    commonly known as a “lemon law” authorized a civil penalty
    if a car dealership willfully failed to comply with the lemon
    law’s requirements. The lemon law imposed various
    obligations on car dealers, including an obligation to replace
    or refund the cost of any new car if recurring problems could
    not be satisfactorily repaired after multiple attempts. (Civ.
    Code, §§ 1790, 1793.2, subd. (d)(2).) Under the law, a car
    buyer could obtain compensatory damages from a dealer who
    fails to comply with the law’s requirements, and the buyer
    would be entitled to additional civil penalties if the dealer’s
    failure to comply was “willful.” (Civ. Code, § 1794, subds.
    (a), (c).) The Kwan court held that it was error to give a jury
    instruction defining willful as “‘simply a purpose or
    willingness to commit the act or to make the omission in
    question’” 
    (Kwan, supra
    , at p. 181) because it “‘would render
    meaningless or inoperative the Act’s distinction between
    willful and nonwillful violations.’” (Id. at p. 184.)
    In Kwan, the jury imposed a civil penalty on the
    dealer, despite its manager’s claim that his failure to offer
    15
    the plaintiff either a refund or a replacement vehicle was
    based on his good faith, reasonable belief that the plaintiff
    had been satisfied by the dealer’s final repair of the vehicle.
    (Id. at pp. 179–180.) The dealer argued that in light of that
    contention, the jury instruction on willfulness—modeled
    after Penal Code section 7, subdivision (1) and stating that a
    “willful” act or omission “‘implies simply a purpose or
    willingness to commit the act, or to make the omission’”—
    was inadequate because it failed to distinguish between a
    dealer who believed, reasonably and in good faith, that no
    refund or replacement was required under the Act, and one
    who had no such belief. 
    (Kwan, supra
    , 23 Cal.App.4th at
    pp. 180–181.)
    But the holding and reasoning in Kwan is necessarily
    limited to the specific statutory scheme and fact situation
    under consideration in that case. The court made the
    limitations of its holding clear, stating that the defendant
    “was entitled to an instruction informing the jury its failure
    to refund or replace was not willful if it reasonably and in
    good faith believed the facts did not call for refund or
    replacement. Such an instruction would have given the jury
    legal guidance on the principal issue before it in determining
    whether a civil penalty could be awarded. The Penal Code
    definition of willful, by itself, gave inadequate guidance
    under the circumstances of this case.” 
    (Kwan, supra
    , 23
    Cal.App.4th at pp. 186–187.)
    Turning to the License Law, we are not persuaded by
    Acco’s argument that the term “willful” in section 7110 must
    16
    be interpreted to require specific intent, meaning that the
    licensee intentionally or knowingly decided to disregard and
    violate the building laws. First, as Acco appears to
    recognize, such an interpretation would result in the term
    “willful” being given a different meaning in section 7110
    than in section 7109. (See 
    Mickelson, supra
    , 95 Cal.App.3d
    at p. 635.) Second, and more significantly, the rules of
    statutory interpretation require us to “‘harmonize statutes,
    reconcile seeming inconsistencies in them, and construe
    them to give force and effect to all of their provisions.
    [Citations.]’” (Pacific Palisades Bowl Mobile Estates, LLC v.
    City of Los Angeles (2012) 
    55 Cal. 4th 783
    , 805.) An
    interpretation of section 7110 that permits discipline when a
    licensee fails to comply with the specified laws is consistent
    with other provisions of the License Law that require
    licensees to demonstrate knowledge of building laws and
    other state laws as a condition of obtaining a license (§ 7068,
    subd. (d)), imposes penalties for failing to exercise direct
    supervision and control over construction operations to
    ensure compliance with applicable rules and regulations
    (§ 7068.1, subd. (a), (e)), and creates a rebuttable
    presumption that “construction performed without a permit
    is a willful and deliberate violation.” (§ 7090.)
    Acco argues that interpreting “willful” to only require a
    general intent as described in Penal Code section 7,
    subdivision (1), renders the term meaningless and converts
    section 7110 into a strict liability statute where every
    violation of a building requirement would be subject to
    17
    disciplinary action. We disagree. Interpreting section 7110’s
    use of the word “willful” as requiring general intent does not
    result in strict liability for licensees. We can imagine the
    absence of a willful or deliberate disregard of building laws
    occurring in the following scenario: A contractor attempts to
    obtain a building permit but is unable to obtain one because
    the local permitting authority incorrectly believes no permit
    is required. Even if it is later established that the permit
    should have issued, the contractor’s failure to obtain the
    required permit cannot be considered a “willful” violation of
    the applicable laws, and therefore discipline under section
    7110 would not be warranted. (See, e.g., Rappleyea v.
    Campbell (1994) 
    8 Cal. 4th 975
    [relief from default judgment
    appropriate where litigants were initially mistakenly
    misinformed by court clerk and later by an attorney].) We
    can also imagine the absence of willful or deliberate
    disregard of building laws where a city’s permitting
    requirements are ambiguous or subject to interpretation.
    While those particular facts are not before us, we venture to
    say that such factual situations might result in a licensee’s
    challenged conduct not coming within the ambit of
    disciplinary action under section 7110, even where there was
    a finding of a violation of the building laws.
    We further reject Acco’s argument that liability under
    section 7110 is precluded where a licensee acts in good faith.
    Even Justice Werdegar agreed that “moral blameworthiness
    is not a necessary element of willful conduct” under the
    provision of the Civil Code she was construing in Kwan.
    18
    
    (Kwan, supra
    , 23 Cal.App.4th at p. 181, citing Ibrahim v.
    Ford Motor Co. (1989) 
    214 Cal. App. 3d 878
    , 882–884.) Penal
    Code section 7, subdivision (1), also clarifies that an act may
    be done “willfully” without an intent “to violate law, or to
    injure another, or to acquire any advantage.” (Pen. Code,
    § 7, subd. (1).) As the Board points out, the Penal Code
    definition of willfulness has been adopted in other cases
    involving discipline of members of licensed professions as
    well. (See, e.g., Dahlman v. State Bar (1990) 
    50 Cal. 3d 1088
    ,
    1093 [willful violation of rules governing attorneys “does not
    require bad faith or actual knowledge of the provision which
    is violated”].)
    Substantial evidence supports the finding of a
    violation of section 7110
    Acco contends that, even if not interpreted to require a
    showing of specific intent to violate the building laws, there
    is not substantial evidence in the administrative record to
    support the finding that it willfully disregarded the building
    laws in violation of section 7110. We disagree.
    Acco tries to characterize the failure to obtain a permit
    as an “inadvertent mistake” based on the failure of a single
    employee.5 But the employee’s intentional acts are
    attributable to the company. The company holds the
    5  Acco did not argue to the administrative law judge or
    to the trial court, and does not argue on appeal, that it is not
    responsible for actions of its employee manager.
    19
    contractor’s license, and Narbonne is the “responsible
    managing officer.” As such, he is “responsible for exercising
    that direct supervision and control of [Acco’s] construction
    operations to secure compliance with” the laws and
    regulations applicable to contractors, at risk of being fined or
    even prosecuted for a misdemeanor. (§ 7068.1, subd. (a), (e).)
    Acco emphasizes that its policy and procedure is that a
    project manager is “supposed to go through the permit
    coordinator to determine permit requirements and actually
    pull the permit.” Here, the evidence supports that the
    project manager made an affirmative decision not to inquire
    about the permitting requirements, and to proceed with the
    boiler replacement having no permit. This conduct
    constitutes willful disregard of the building laws.
    20
    DISPOSITION
    The judgment is affirmed. Costs on appeal are
    awarded to respondent, the Contractors’ State License
    Board.
    MOOR, Acting P.J.
    We concur:
    KIM, J.
    JASKOL, J.
     Judge of the Los Angeles Superior Court, assigned by
    the Chief Justice pursuant to article VI, section 6 of the
    California Constitution.
    21
    Filed 12/13/18
    CERTIFIED FOR PUBLICATION
    IN THE COURT OF APPEAL OF THE STATE OF
    CALIFORNIA
    SECOND APPELLATE DISTRICT
    DIVISION FIVE
    ACCO ENGINEERED                   B282944
    SYSTEMS, INC.,
    (Los Angeles County
    Plaintiff and                Super. Ct. No.
    Appellant,                        BS159740)
    v.
    ORDER CERTIFYING
    CONTRACTORS’ STATE                OPINION FOR
    LICENSE BOARD,                    PUBLICATION
    Defendant and
    Respondent.
    THE COURT:
    The opinion in the above-entitled matter filed on
    November 15, 2018, was not certified for publication in the
    Official Reports. Upon petitioner’s request and for good
    22
    cause appearing, it is ordered that the opinion shall be
    published in the official reports.
    Pursuant to California Rules of Court, rule 8.1105(b),
    this opinion is certified for publication.
    __________________          __________________
    __________________
    MOOR, Acting P.J.           KIM, J.                JASKOL,
    J.*
    * Judge of the Los Angeles Superior Court, assigned by
    the Chief Justice pursuant to article VI, section 6 of the
    California Constitution.
    23